WEDNESDAY 26 JUNE 2002

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Members present:

Mr Bruce George, in the Chair
Mr David Crausby
Mr Gerald Howarth
Mr Kevan Jones
Jim Knight
Patrick Mercer
Syd Rapson
Rachel Squire

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Memorandum submitted by MoD

Examination of Witnesses

RT HON GEOFFREY HOON, a Member of the House, Secretary of State for Defence, MR BRIAN HAWTIN CB, Director General, International Security Policy, Ministry of Defence, and MR WILLIAM EHRMAN CMG, Director, International Security Policy, Foreign and Commonwealth Office, examined.

Chairman

Welcome, gentlemen. We are reaching the concluding stages of our inquiry into the future of NATO and NATO enlargement and, as is the tradition, the whole process is wound up or wound down, I am not sure which, by Ministers, so we very much welcome you, Secretary of State, Mr Hawtin and Mr Ehrman. Would you like to make some opening remarks, Secretary of State, please?

(Mr Hoon) Thank you, Chairman, and could I congratulate the Committee on choosing this, arguably the nicest, day of the year on which to spend the morning in the surroundings of the House of Commons.

Mr Knight: It needed to be rearranged for England to lose the football!

Chairman

We actually had a meeting in the Russian Foreign Ministry as the game was being played, which shows our dedication.

(Mr Hoon) I have never doubted your commitment to the pursuit of the truth, but I am grateful to the Committee for the opportunity of setting out the Government's thinking on the future of NATO as we approach the Summit of NATO Heads of State and Government in Prague on the 21^st and the 22^nd November. Expectations of Prague are high. Prague can meet those expectations only if Allies face up to the need not only for an enlargement, but also for what we would describe as a transformation of the Alliance. It is right that you should ask what do I mean by 'transformation'. I do not mean NATO suddenly becoming the world's policeman, but I do mean NATO becoming more effective in facing new challenges, building on the Strategic Concept, NATO having the capabilities it needs to face new threats, NATO enlarging to consolidate the security gains of the past decade, and NATO adapting the structures and processes to keep pace with the strategic setting. We certainly need a new Capabilities Initiative at Prague to give us the flexible, deployable, sustainable armed forces we have long wanted. The fight against terrorism underlines this need. Unless the Europeans do more, spend more and spend better, then there is a clear danger that the transatlantic link will weaken. We also need to look at NATO's command structures, which need improving to meet the present requirement. On enlargement, I want to emphasise the United Kingdom's strong support for a robust round at Prague. I also want to stress the need to go into this with our eyes open - to ensure a bigger NATO that can still be effective, and to help new members bring something worthwhile to the table. The meetings of NATO Foreign and Defence Ministers this spring have placed us, I believe, in a good position to take the right decisions at Prague. This relates in turn to adaptation. NATO's central bureaucracy has not yet faced up to the challenges of the 21^st Century, and Lord Robertson is trying his hardest to make sure it does. The United Kingdom is right behind him in this effort. Finally, some commentators have asked whether NATO still has a role. To my mind, that is the wrong question. People in the Balkans would not be asking that question, people in NATO's partner countries, including those actively seeking to join the Alliance, would not be asking it, and people in NATO's armed forces, who know the whole is greater than the sum of its parts, would not be asking it. The issue is not whether NATO has a role, but how it can best fulfil its role. The five tasks set out in the Strategic Concept will, with some shifting of emphasis, be as valid for Prague as they were for Washington. The real issue is how NATO can best meet these tasks.

Thank you very much. The Committee went to all serious applicant States about a month ago, the Baltics, Slovenia, Slovakia, Romania and Bulgaria, and, generally speaking, I think we were very impressed by what they had to say to us. We were not there with our eyes half open and we knew most of the arguments for and perhaps potentially against. I suppose the impression we had, or certainly the impression I had, confirms what you said, Secretary of State, that robust enlargement is likely to be seven nations, perhaps three, four, five or six, but hopefully seven, and NATO is likely, if your advice is pursued, let's say, to fight until the final decision is made and no doubt continue to improve afterwards. Could you expand slightly on what you said in your introduction and say how many invitations do you anticipate being issued at Prague? Will there be a sort of Government health warning or a NATO health warning attached to them about the process of reform continuing and not terminating upon accession?

(Mr Hoon) Well, I too have made the same journey as you, perhaps in a slightly different order, but I have visited all of the aspirant nations and have found an absolute determination to reach NATO standards, but I do want to emphasise that I believe that it is too soon as yet to be saying who might be invited. It is a matter for Prague and it is a matter for discussion amongst Allies, but we are following closely the efforts that individual nations are taking to reform their armed forces and defence structures, and we obviously are encouraging the Membership Action Plan process. The one point I have consistently made when I visited aspirant nations is that the issuing of the invitation is not the conclusion of the process; we need to ensure that countries work through the Prague Summit, recognising that this is a continuing effort to ensure that they have both internal reform to be able to provide the right kinds of forces for NATO, but also that they can make a real contribution to collective defence, so there is an internal aspect for each of the countries as well as producing a force contribution that can be useful in support of Article 5 and useful, therefore, in support of NATO operations.

Do you think NATO will be enhanced as a result of a robust debate and a large number of invitations being made?

(Mr Hoon) The United Kingdom is a strong supporter of enlargement and a strong supporter of a robust round of enlargement at Prague, and we see real benefits not only in geo-strategic terms of having new members of NATO at this stage, but we also see capability benefits which can flow from a substantial enlargement.

When NATO decides finally on the number of countries to be admitted, could you give us some indication of the balance between the different arguments which will be used? Will the political outweigh the military? Will there be countries who, you may think, will not make a significant or perhaps any real contribution to the military capabilities of NATO, but the arguments that are more political might outweigh those military arguments? What is the balance and do you think it might have changed over the last twelve months?

(Mr Hoon) I believe it is very important that the same standards are applied to each of the aspirant nations in terms of their being able to make an effective military contribution to the Alliance and that is why I emphasised a moment ago the importance of the Membership Action Plan. It is ensuring that countries reform their military and their military contribution to preserve the effectiveness of NATO as a military alliance which is, after all, its unique quality as an international organisation. We have any number of very effective international organisations where we can exchange political views and political ideas, and this is the one organisation where its raison d'être is its effective military operation.

One of the points raised with us was that a number of countries have not, let's say, ingratiated themselves with the applicant countries. Some are saying very nice things and giving very, very supportive and soothing words, whereas we are seen being obviously the hard cop, the tough cop. Do you think that is a fair dichotomy? Have you been going around knocking them on their heads and telling them that they have really got to get their act together, otherwise the nice words being said may not actually come to fruition?

(Mr Hoon) I have been going around telling them precisely what I have been telling you this morning. I have not put it in any different terms. We want to see a robust round of enlargement, we want to see new Member States in NATO some time after Prague, but we equally want to see NATO preserved as an effective military alliance and those countries making an effective military contribution. I have not actually had any hesitation among the countries that I have visited in agreeing with those sentiments. They themselves recognise that this is an important opportunity for them to engage in the reform process and that is why, after all, they have strongly supported the MAP process because they themselves want to be able to make an effective contribution. It is also a very good opportunity internally for engaging in some quite difficult issues of defence reform.

One thing, Secretary of State, I think we all found in visiting the applicant nations was how much they appreciated the contributions made by MoD staff who were inside their Defence Ministries, and this was not them just being polite to us because we met them of course, but their presence was greatly appreciated and has added very significantly to their ability to meet the demands that NATO has made upon them, so any opportunity you would have on behalf of our Committee to compliment those men and women who are working inside those Defence Ministries, we would be most grateful.

(Mr Hoon) Well, I too have had the opportunity of meeting them, and I am grateful for your comments and I will make sure that they are passed back. Certainly I think they have made an outstanding contribution, always reflected in the comments I have received from host governments who have very much appreciated the expertise and sheer experience that has been brought to bear. The only challenge for the Secretary of State for Defence is to persuade those people, who themselves have been having a very, very stimulating and enjoyable time, to come back and work in the Ministry of Defence.

Yes, it will be a bit of an anti-climax, but are they likely to be replaced because the task will continue after accession?

(Mr Hoon) By and large, yes. We have certainly made it clear that if host countries believe that this has been a useful contribution to the Membership Action Plan, the process of defence reform, then we will be delighted to continue with it, either with the particular individuals in question if they wish to continue and that is consistent with their own personal and career plans, or equally by replacing them where appropriate, but I do not think it is right to generalise across the board. It will depend on both the individual's position and on the particular country in question, but, in principle, we certainly want to continue to offer what assistance the host country requires.

Mr Howarth

Secretary of State, if I could endorse what the Chairman has said about the effect of our MoD staff out there, I think he is entirely right to pay tribute to them. They have clearly enhanced defence diplomacy and if that is defence diplomacy, it certainly works. Going back to the earlier point about the attitude of the British Government, it was clear, certainly in Bulgaria and Romania which I visited, that there was a perception of the UK almost playing a straight bat. Now, I know the others do not play cricket and we do, but there is a perception that if these countries are admitted, it will not be thanks to the United Kingdom, and if they are rejected, it will be because of the United Kingdom. It certainly appears that even the United States is giving the nods and winks which the United Kingdom is not, so I would like to put it to you that there is a risk here to the United Kingdom either way and that if you have not made up your mind that, come November, the British Government will take a favourable view of all or most of the applicants, it might be advantageous politically so to indicate in advance.

(Mr Hoon) Well, I was in Bulgaria and Romania last week and I have recently had meetings with both of their Defence Ministers both there and obviously here, and all I would invite you to do is to check the newspapers the day after my visit to each of those countries.

I am afraid I do not get the cuttings from the Bulgarian or Romanian press.

(Mr Hoon) I think you will find they deal with your problem.

Chairman: I do not think any newspaper can deal with it!

Mr Howarth

Secretary of State, perhaps I could invite your private office to let me have a copy of those cuttings.

(Mr Hoon) I think that the research resources available to you ought to be able to cover looking at the Internet for access to that information.

Thank you for your help, Secretary of State!

(Mr Hoon) I am always delighted!

Mr Crausby

There has been some concern expressed about aspirant countries continuing with defence reform. Are you confident that the framework for enlargement set out at the Reykjavik Summit will ensure that countries maintain the momentum of defence reform once invitations have been issued and the process continues?

(Mr Hoon) Well, you are absolutely right to highlight that concern. It is an issue and that is why, as I mentioned earlier, on these visits that I have been making, I have emphasised that this is a process and it is not a process which ends at Prague. By and large, that has been accepted because I think the other side to it is to recognise, as I have just said in answer to a question from the Chairman, that the opportunity to engage in serious defence reform is one that is strongly supported certainly in Defence Ministries because it gives them a lever, it gives them a strong argument to press both with their colleagues in government and obviously with the public in the country in question. They want to reform, they want to have armed forces which are useful and they need obviously the resources to support that process, and this is a means of achieving that. I was talking to a Defence Minister the other day who has a requirement in their constitutional arrangements at the present time that they should spend at least 2 per cent on defence and notwithstanding whatever economic difficulties affect other government departments, that is an absolute fixture of their arrangements, so that is good for him, but it is also good for the country and it is also good for these kinds of processes.

Chairman

Are we going to inspire them further by increasing our defence budget?

(Mr Hoon) Well, I would simply invite you, Chairman, and the other Members of the Committee just to be a little more patient for just a short, further time before those announcements are made.

Mr Crausby

One of the politicians we met in Russia last week pretty well said, "If you want the Bulgarian army, you are welcome to it". That is the impression certainly that I got. Do you see the Alliance's military effectiveness being improved by a large expansion to 27 members? As it goes on, it surely gets weaker?

(Mr Hoon) Again I made the point earlier that there are geo-strategic factors, but there are also capability issues and this process of reform needs to produce armed forces which are not only useful as far as the countries themselves are concerned, but also can make a particular contribution to international operations, as Bulgaria has done in Afghanistan, for example. As we may get on to in due course, I think the issue of specialisation, of developing particular capabilities that are in short supply, and we have discussed this on previous occasions, we all know there are areas of expertise that our Allies need to develop, well, this is part of the solution to that problem, it seems to me, and encouraging, as I have done, countries to look at the capability shortfalls and find ways in which they can help to fill them. Actually my view, particularly of the smaller countries where historically they have perhaps sought to simply emulate the capabilities that are available to larger countries, it can actually give them a unique contribution to Alliance operations by developing niche capabilities that other countries simply cannot supply at the time. Therefore, when, as we do, we look around for contributions to international deployments, a smaller country might well actually get itself a seat at the table and participation in that operation in a way which historically it could never have contemplated, and when I talk to some of the aspirant nations, that has been a very attractive prospect for them.

Rachel Squire

Picking up on that, Secretary of State, can I ask you whether in your thinking, both post-Kosovo and now post-September 11th, it is likely that any NATO-led operation would involve all the present NATO countries, let alone those who hope to join or will be invited to join later this year, in actually a single-field operation or is the thinking both in NATO and in our own Ministry of Defence that the likelihood of future operations, NATO-led or whatever, is more likely to involve some Member States rather than all in actually supplying the capability, whilst obviously all may have a voice when it comes to the decisions taken around the meeting table?

(Mr Hoon) I was just checking with Brian Hawtin whether that had ever happened in the past, whether there had been a situation where every single nation had deployed its forces in a field operation and we are struggling to think of one where every single one - and obviously every country has made some sort of contribution, I think, to Afghanistan, but Iceland.

(Mr Hawtin) Yes, I do not think Iceland has in terms of forces.

(Mr Hoon) And Luxembourg may be another example. I am not ducking the question and I can see why you ask the question, but I think it is relevant to ask ourselves, "Has it worked in the past?" I do not think we are suddenly setting new standards for the future, and in the past we have always accepted that there will be coalitions that are willing formed from within NATO membership and that has worked perfectly satisfactorily in the past and I do not see any reason to doubt that it will not work perfectly satisfactorily in the future.

Chairman: We will probably come on to this later, Secretary of State.

Jim Knight

Secretary of State, in terms of maintaining the momentum of reform amongst the new members, to what extent is it a problem that in some way that extra energy and enthusiasm for NATO is not necessarily matched by some of the existing members in that two-thirds of the last wave of new members do not seem to have maintained the momentum, we have problems in terms of the Capabilities Initiative, and those new entrants, once they have got membership, once they have got their Article 5, which they are all so keen to have, they could say, "Well, hang on a minute, you are not fulfilling your part of the bargain, so why the hell should we?"

(Mr Hoon) Well, I certainly think it is fair, and I made this point when talking to the aspirant nations, that we should not expect them to fulfil higher standards of capability improvements than we ask of ourselves, which is why we are so keen at Prague, as I have said already, to see a new Capabilities Initiative to continue to develop the capabilities that we lack and require as part of in effect the process of enlargement. So the point I have made, as I hope is consistent with the thrust of your question, is that this process of enlargement is not simply existing members looking outwards, but it is existing members looking outwards, but at the same time examining for themselves what further changes are necessary as NATO itself develops, so I do not think you can have a substantial enlargement without NATO itself facing up to the implications of that.

Mr Jones

Secretary of State, you mentioned the new countries bringing new military capability to NATO. We took evidence from someone a couple of weeks ago who said that what we should be looking at are some of the lessons learned from the previous enlargement, and I was looking at some notes here. For example, he referred to the Czech and Hungarian military as "basket cases" and that the reforms undertaken have been incompetently done. How many lessons have been learnt from the previous enlargement in terms of the reforms of the armed forces?

(Mr Hoon) Well, I certainly would not accept those descriptions of either of those countries and I think that is a serious misunderstanding of what has been taking place. Both of them supply extremely useful components on international deployments, when asked, so I think that is a very harsh assessment of what has taken place. Certainly what is important, and I think this is the same as the question that Jim has just asked in a different way, is that we recognise in a substantial enlargement the need for NATO itself to adapt, to change and to transform, as I said earlier, as part of that process. This is, as I say, not simply NATO standing still and setting a certain bar for new nations; it is about NATO itself recognising that we are dealing with a flexible situation that we have to react to and enlargement is simply part of that process, and we react by enlarging, but we also react by changing the way in which we operate.

To what extent though will benchmarks put against reforms in terms of the military of the aspirant nations be put against the political will actually to get into the club, as it were?

(Mr Hoon) As I said in answer to the question from the Chairman earlier, there will be a consistent standard approach and the emphasis of the United Kingdom is very strongly in terms of fulfilling in terms of the Membership Action Plan and, therefore, engaging in real internal defence reform and making an effective contribution to the Alliance. Brian, do you have anything to add to that?

(Mr Hawtin) No, I think that is absolutely right. On the point about reform, I think the Membership Action Plan has evolved and obviously there has been increased focus in the light of experience on how one can best help, both through NATO and through bilateral assistance, the aspirants to reform, but we are continually learning from experience and factoring that into the Plan, the targets and the way the countries are being assisted in reforming and restructuring.

Just going on to the actual role of NATO itself, we have taken evidence from a number of people and I accept there is a wide range of views of NATO, ranging from, I think, William Hopkinson who said that NATO is dying, but is not dead yet, to Professor Heisbourg who said that it is actually dead as an actual military alliance.

(Mr Hoon) Forgive me for interrupting you, but I hope that is not the full range of opinion hat you have obtained.

No, no, it was not. We also have some saying that it is not quite dead, but in need of some vital reform, and that is the issue I want to come on to really. If you obviously do not agree that it is dying, what is your assessment of NATO currently and what do you see as the changes which are needed internally within NATO, not just if we have got the expansion, but also as, for example, we have not got the threat from the Soviet Union and the operations that NATO are possibly involved in in the way it is organised are going to change or have changed?

(Mr Hoon) I set out in opening the strong argument for NATO's continuing vitality and its continuing role in the world, and the best evidence for that are the number of countries queueing up to join and the number of countries prepared to take very difficult decisions as part of that process, so, as I say, I do hope that your researches on attitudes towards NATO have gone a little beyond that rather narrow and somewhat extreme perspective. Certainly NATO has to change

and I make that absolutely clear and it is part of our approach. It has to change not only in the light of the fact that the Soviet Union no longer exists and Russia is an ever-closer partner in a number of international operations and sits around the table in the NATO-Russia Council, so the world has changed and absolutely for the better, but there are still significant threats out there that we have to deal with. The world may well be a safer place as a result of the end of the Cold War, but it is certainly a less certain place. Some of the stability that the Cold War brought has ended and we have to deal with that, as we have to deal with, for example, conducting operations as far away as Afghanistan with all the logistical challenge that that involves. That is why we need to ensure that in the process of change, NATO has the right kind of capabilities to be able to conduct operations in that changing and increasingly uncertain world. That is why NATO continues to have a function and that is why, in answer to the Chairman's first question, I laid emphasis in particular on NATO's military capabilities because if NATO simply becomes another international forum, however fascinating it may be, for exchanging international views of a political kind, then we will have wasted a unique opportunity of ensuring that NATO itself remains a unique militarily-capable alliance.

What is actually unique about NATO as opposed to other organisations of a political nature, which is what NATO is becoming?

(Mr Hoon) Well, you are asking me to repeat what I just said.

Well, no, I did not really get an answer to the question I asked. The point I am making is where will NATO be, for example, in your mind in ten years' time, what are the needs in terms of reform and what is its actual role now?

(Mr Hoon) I anticipate that NATO will be a larger organisation, it will have more countries in membership, but it will still remain, certainly if the United Kingdom has its way in terms of this reform process, an effective military alliance, setting standards, establishing inter-operability, ensuring that Member States can make the right kind of military contribution to whatever military activities are required in ten years' time, and it will also at the same time obviously have a powerful political role as a very large and successful military alliance. Would you like to come in, Brian?

(Mr Hawtin) Only on the military strengths. I think it continues to be unique in that sense. It is the only regional security organisation anywhere in the world which has the ability to deliver very considerable military puissance quickly, effectively over very considerable distances and to sustain that capability over considerable periods of time, and it has done that in a number of instances with the supporting politico-military crisis management mechanism. That is what makes it distinctive and different from any other organisation and it has the other attributes which the Secretary of State has described.

(Mr Ehrman) Could I just mention something that was in the Reykjavik Communiqué of the Foreign Ministers which fits in very much with what the Secretary of State is saying about the deployable distance. The Foreign Ministers agreed that NATO needed to have forces which could move quickly to wherever they are needed and sustain operations over distance and time, so that is, I think, an evolution to meet some of the new threats and at the same time NATO is of course working up at the moment its high-readiness deployable forces which can fulfil that role.

So do you see NATO's role as a global role?

(Mr Ehrman) Well, the NATO Foreign Ministers were very clear that we need to be able to field forces wherever they are needed and, as the Secretary of State has said, Afghanistan, where many of our forces have been recently, is at a considerable distance.

That is very helpful. In your opening statement you said, "I do not mean NATO becoming a world policeman", but is that not what you are actually suggesting?

(Mr Hoon) No, it is not. We are talking about, as with the operations in Afghanistan, being able to reach the source of threats which might challenge our own security and challenge the security of our Allies. That does not mean engaging in each and every operation that might arise anywhere in the world, but it certainly means being able to engage in operations that have as their ultimate aim dealing with threats to our own safety and security and that has not changed. That has always been the case as far as NATO is concerned.

(Mr Hawtin) Can I just add one point to that, and I think the Secretary of State alluded to it earlier. Even if NATO is not being deployed by NATO, and it is not in ISAF at the moment, so it is not a NATO flag over that, and it was not deployed in the Gulf as a NATO-led coalition, the key point is that the nations participating in both of those operations are doing so working to common NATO standards and to interoperability, training, exercises and procedures developed through NATO over very, very many years of hard work and effort and one cannot replicate that easily. You cannot produce it at the snap of one's fingers and that is NATO's key strength.

Is it time for a name change then?

(Mr Hoon) No, no. I think there is an important concept though, if you will forgive me, which your questions are missing. The concept is that NATO is a defensive alliance. The whole point of Article 5 is to provide that security guarantee to each and every member, but if a threat arises somewhere else in the world and can be delivered in New York or Washington, then clearly we have to have the ability of dealing with that threat. It is not about a name change at all; it is about making sure that we have the right military capabilities to be able to deal with that threat to our safety and security and the safety and security of our Allies wherever it arises.

What is the threat against NATO members then?

(Mr Hoon) On September 11^th, there was a clear threat to the safety and security of the United States, a member of NATO, and that would arise wherever that threat was delivered against a NATO Member State. That is why I think, with the greatest respect, your questions are missing the point.

Well, I think you are doing a good job of avoiding answering them, but the point surely is that the threat you have is no longer the Cold War threat, is it, and if you are saying it is because of the conclusion of that what NATO has become, then we can expand it for ever more, can we not, including a great number of nations, which takes it away from the initial point about it being a North Atlantic security organisation?

(Mr Hoon) I do not think you will find anywhere in the Treaty any reference to the Cold War threat or indeed to the Soviet Union. The whole point about Article 5 is that it is a security guarantee for the Member States and inevitably, as the world changes and moves on, those threats will change. Unfortunately your questions are not.

And your answers are not either and we are not getting very far, but the point is where do we actually stop the expansion of NATO? Does it become a global organisation?

(Mr Hoon) Well, I think that is a different question and I think that is a relevant issue, but as for the moment I do not think we need to deal with it because that global expansion in that sense is not arising. The aspirant nations are clearly nations who could reasonably expect to be part of a North Atlantic Treaty Organisation and are clearly European nations in that sense. There is nothing conceptually different about any of the existing aspirant nations. I accept that at some stage in the future we might have to deal with that more philosophical issue, but it does not arise for the moment.

So NATO actually has borders where you will stop the expansion?

(Mr Hoon) I am deliberately avoiding saying that because I do not think that for the moment there is a need to answer that. There might come a time, I recognise, when that becomes a relevant issue, but it is not the case today, and you will know from your studies of history of the 17^th, 18^th and 19^th Centuries, Russia was regarded as a European nation where French was spoken at court.

Chairman

I must say, it is nice to know that in your legal career you never asked provocative questions!

(Mr Hoon) Well, I must say I always find it strange when I am invited in here as a witness because in my legal career that was the one thing I never was.

Rachel Squire

All of the points you have made about NATO's role and the ability to put together a force that can go to Afghanistan and somewhere else in the world where there is seen to be a real threat to NATO members, can I ask you whether there is a common view on that amongst the NATO Allies because we were given an article by The Financial Times last week which was quoting the Secretary General of NATO who very much was saying similar things to the points you have just made, Secretary of State, but it also then quoted the Deputy Assistant Secretary of State for Defense and European Affairs in the US, Ian Brisenski(?), as saying to a House Committee that NATO is bound geographically to Europe and the US does not see a wider role for NATO forces in areas such as the Middle East or Africa. Is there some ongoing debate here and perhaps differences of view with our US Allies or is the thinking still evolving or how can you explain what appears to be a bit of a difference of view?

(Mr Hoon) There is no difference of view, but can I just emphasise that when I talk about a threat, that threat would have to be imminent and whatever action that we took would be entirely consistent with international law. This is the Alliance setting out, as it did at Reykjavik in the Summit Declaration, its need to be able to deal with threats to Alliance security and Alliance members wherever those threats arise, and that is something shared absolutely by the leaders of the Alliance because they said so at Reykjavik.

Mr Howarth

Secretary of State, we did have a number of witnesses the other day and they were all agreed that one of the essential keys to the future success of NATO is the involvement of the United States, and whether I am right or not, you will tell me, but I detected a note of concern in your opening remarks when you referred to the transatlantic link being at risk if the European countries basically did not pull their weight. Quite clearly there are a number of concerns about the relationship between the United States and NATO. Many commentators take the view that the United States is now less interested in NATO than in the past and that this was given real impetus when the United States did not involve NATO in the Afghanistan operations, save for a number of specific roles which were carried out by NATO, including the deployment of NATO AWACS to survey the United States airspace, but are you concerned that the pattern set by the Afghanistan operation by the United States could be a pattern for future action by the United States and could harm NATO?

(Mr Hoon) I think I have already made the point that Afghanistan is not something that can be used sensibly as an example of some lack of US commitment to NATO because the same arose in relation to the Gulf War, so what has to happen in these circumstances is that coalitions of the willing are formed, the appropriate capabilities are made available, and specifically as far as Afghanistan is concerned, for example, we needed bases, we needed support from well beyond the geographical area covered by existing NATO members and, therefore, it made military sense to involve a wide range of countries who were not existing NATO members. Having just dealt with that, I think it is right that we should focus on the importance of continuing US involvement in the Alliance. I think it is absolutely vital that the United States remains engaged and the best way of ensuring that, in my view, is to ensure that the other members of the Alliance play their part in developing, funding appropriate military capability that allows them to work effectively alongside the United States, and it seems to me that there is both a political and a military dimension to that. The political dimension is for someone who has lived and worked in the United States, a regular visitor there, that there might come a time, I do not believe it is relevant today, but there might well come a time when the US taxpayers question why it is that they are making a disproportionate contribution to the Alliance and that that has an impact on the political leadership to the extent that they say, "We are no longer prepared and willing to do that if European nations or non-US nations are themselves not prepared to fund and make appropriate military capabilities available". It follows from that that the military justification is to ensure that we can play a part alongside the United States and that means having the appropriate capabilities available to support international operations, and it means ensuring that those capabilities are of the kind that allows us to operate together. As the United States continues to increase its defence spending, it is largely committing that spending on developing ever more sophisticated technology and that does present the non-US members of the Alliance with a challenge because we are unlikely to be able to match that level of spending by the United States, therefore, we have to develop those capabilities, particularly hi-tech capabilities collectively, at least in groups of nations who are prepared to work together and pool their resources to achieve that. Otherwise, I accept there is a risk that, as the United States develops ever more sophisticated technology, it will be ever more difficult for us to work alongside them and that is why the United Kingdom faces so much emphasis on improving capabilities; it has both a political and a real military aspect.

I would put it to you that not only is there frustration in the United States about this growing capability gap, as evidenced by the disparity in the budgets, but there are concerns that the minds of not the United Kingdom so much, but certainly other European countries are being focused on other issues. If I can remind you of what General Ralston said in testimony to the House Committee on International Relations in the United States last week, he made a number of points of great concern and I think the Committee would be appreciative of your reaction to this. He set out his main concern, that, "ESDP can strengthen Europe's security posture as long as it is achieved in a manner that is complementary to NATO, not in competition with it", and he gives a warning that, "The EU should seek to avoid investing limited resources in ESDP capabilities that are redundant with, as opposed to complementary to, NATO capabilities", and he said the best way to re-establish NATO's supremacy was "to give the Deputy Supreme Allied Commander Europe a robust role as strategic coordinator in both NATO and EU-led operations". Now, coming from the Supreme Allied Commander Europe, that is a pretty powerful statement of concern and I wonder what the reaction of our Secretary of State is to that.

(Mr Hoon) Well, I actually think that that references fairly precisely British Government policy on all of those particulars, and I am delighted that he was endorsing not only the position that the British Government has taken, but broadly the position that European nations have taken. I doubt that any of our continental Allies would disagree with what you have just read out. We need to ensure that the pressure is maintained not only to establish the policy, but to deliver it.

So are you saying it is the policy of the French Government, the Italian Government and the German Government that the force-generator for an EU-led operation should be the Deputy Supreme Allied Commander Europe of NATO?

(Mr Hoon) Where the force-generation requires NATO planning to be involved, then yes, that has been the assumption that has been made all along. There are obviously still one or two details to be resolved before absolute coherence is achieved between the EU and NATO, but you are well aware of what they are and we are working on them and we are close to, I hope, the successful resolution of those issues, but, broadly speaking, that is a policy that has been agreed, and bear in mind the only qualification I give is that it is not always anticipated that the scale of operation would require NATO participation, but on any operation of any scale, then clearly it would and that has been agreed.

So if this is the settled view of the EU countries, why has General Ralston felt it necessary to give this testimony to the United States Congress?

(Mr Hoon) Well, General Ralston is a very, very impressive commentator on NATO issues and he is setting out very clearly a requirement that is strongly supported by all Allies. I think what is a more interesting question is why you find it so difficult.

Mr Howarth: Well, if I move then from General Ralston, there is another NATO official who has issued a stark warning that plans for Europe's $3.38 billion Galileo Satellite Navigation project have put Allied military forces in danger. Now, there is concern being expressed here that whilst there is a very good ground positioning satellite navigation system, GPS, which is American ----

Mr Jones: Can I object to this line of questions because this is not the agreed set of questions. Mr Howarth is using this Committee to score party-political points in his role as a front-bencher. We should stick to the questions we have agreed.

Chairman: The point here is that Members can ask any question as long as it is within the framework of the subject.

Mr Jones: But it is not agreed.

Chairman: That is ancillary.

Mr Jones: Well, it is not in the agreed questioning which we agreed before this meeting.

Mr Howarth

Chairman, I am sure the Secretary of State is fully familiar that Members of this Committee are not automatons who simply read out pieces of paper which are prepared on their behalf and that most of them have minds of their own. I think there is a serious issue here, Secretary of State, which does impinge on the role of the United States. You have seen the frustration there is in the United States about the failure, as they see it, of their NATO partners fully to commit to NATO, and I know the British Government has taken a robust view and that has been really welcomed in the United States, and I pay tribute, and I am very happy to do that publicly, to the actions taken by the British Government following the 11^th September. But there is this issue that again it is perceived by some NATO officials of why is it necessary to set up a new GPS system at huge expense which is simply going to replicate something the Americans have already got and which is integral to NATO's capabilities?

(Mr Hoon) Bear in mind that the Galileo system does not and will not have a defence aspect and that was written into the terms and conditions at the time of the EU agreement, so again whilst I am aware that there is speculation which has been entered into over Galileo, I would emphasise that it was absolutely a condition that this would not have defence implications.

Well, if I can put it to you, what do you think that NATO needs to do to convince the Americans that they need to stay on board?

(Mr Hoon) Well, I have set that out already and what NATO needs to do is to ensure that European nations and Canada are capable of making the kind of capability commitments that give NATO the war-fighting capabilities that it requires and it is all about capabilities, in our view, that we need to be able to develop the kind of capabilities that are necessary, but also that those capabilities should be interoperable with the United States and I set out for the Committee the dangers, as I see them, and we need to address those issues, as we are doing.

Mr Jones: Are we going to ask questions which have not been agreed to be asked?

Chairman: Well, as long as it is within the framework of the hearing, I am afraid people can ask any questions they like even though you might not agree with them.

Patrick Mercer

I will stick entirely to the script. A recent MoD memorandum refers to the need for administrative reform of NATO and talks about the "shortcomings in NATO's existing [headquarter] systems". What do you think are the principal administrative shortcomings of the systems?

(Mr Hoon) Well, I would not actually put it in quite that way in the sense that I think it is unfair to go from a statement which says we need to make changes in NATO to suggesting that there are existing shortcomings. What we are arguing for, and I hope this is consistent with what I have said to the Committee already, is that as we look for significant changes in membership, significant enlargement against the backcloth in particular of the events of September 11^th and an increasing need to make sure that we have the right kinds of capabilities to be able to deploy forces quickly when we need to, then there are some improvements in the decision-making processes of NATO which are required, there is some streamlining, we need to have an organisation that can function effectively not in, how can I put it, not in 1992 terms, but in 2012 terms because the world is a rapidly changing place and, therefore, we need the structures, both the administrative structures, but also the defence command structures that are necessary to be able to have the right kind of organisation that reflects modern geo-political realities.

Does the "quad" system need to be formalised?

(Mr Hoon) There is no quad system. There is no system other than the system laid down in the Treaties.

Chairman

Well, I think you are off the script there, Secretary of State, because the quad system that Patrick is referring to is this informal meeting between four members and if it does not exist, then we have been given a lot of speculation over the last few weeks.

(Mr Hoon) Well, there are regular contacts that I have with Allies, with partners on a very, very regular basis, but there is no quad system.

Formally in the constitution?

(Mr Hoon) I would be delighted to find any reference to any formal requirement that any four Member States meet on a regular basis.

Well, ask Mr Ehrman if he has ever heard of the quad system.

(Mr Hoon) Well, I have certainly heard of it which is why I was able to deny that it exists.

I think Mr Ehrman's silence is key.

(Mr Ehrman) Chairman, to answer your question, Allies meet in all sorts of formats informally, twos, threes, fours, fives, sixes, sevens, so there are all sorts of informal meetings all the time in NATO. As the Secretary of State has said, there is no system of the type which was referred to.

Chairman: We hear what you say.

Patrick Mercer

Structural reform is not on the agenda for Prague. Will it be included? If it is, would it be something that the Secretary-General would pursue?

(Mr Hoon) Structural reform is firmly on the agenda for Prague. It is on the agenda because defence ministers agreed that it should be put on the agenda.

Can you expand on that?

(Mr Hoon) I think I just did, but I shall do so again. We are looking at administrative changes. Lord Robertson has circulated some personal proposals on the way in which he judges the internal mechanisms of NATO, particularly in Brussels. They need to be streamlined and improved and made more efficient and to have a more effective management structure. Those are some thoughtful insights into how he sees his position and how he sees the way in which the management of the alliance, in an organisational sense, needs to be improved. We strongly support that initiative. At the same time we also agreed at a recent defence ministers' meeting that we need to look at the command structure, and whether or not the right headquarters arrangements exist today for the kind of operations that we judge that NATO will need to be engaged in tomorrow. Therefore, we have instigated a review, which I believe will be agreed to at Prague.

Syd Rapson

Secretary of State, in your opening statement you mentioned that central bureaucracy has not faced up to the 21^st century, and together with Lord Robertson you are doing your best to change that. Lord Robertson said in an article in the Financial Times that finally we are beginning the modernisation of NATO's decision-making process. I want to concentrate on the decision-making process as opposed to the bureaucracy which I see as separate. In the North Atlantic Council there is an informality of how consensus decisions are reached and whether that is going to survive. Can NATO and specifically the North Atlantic Council continue to operate on the basis of that consensus, given the politically sensitive and politically divisive decisions that have to be taken in dealing with crises of management situations, particularly if NATO is to develop roles to deploy forces in pre-emptive actions, as recently mentioned, and if NATO is working with a large group of 26 or 27 nations?

(Mr Hoon) I am not sure that there is the neat distinction that you appear to draw. Clearly, it will remain essential that the most important decisions that NATO has to take - those obviously that concern the deployment of armed forces - will have to be taken by consensus. We could not contemplate a situation in which Britain's armed forces were put at risk without Britain's ministers agreeing to that. I cannot contemplate circumstances in which any country would be prepared to allow majority voting to determine the redeployment of its armed forces. That would be quite wrong. Therefore, such consensus issues have to be dealt with. Lower down the decision-making tree - and for that reasons I do not believe that there is quite the neat distinction that you describe - I believe that Lord Robertson is saying, particularly with a substantial enlargement in prospect, that there must be a greater recognition that a growing organisation needs to adjust its management and, therefore, its decision-making systems to allow for the fact that a large number of nations are participating. He has suggested that there would need to be a streamlining of committee structures. He has mentioned that there are something like 400 committees meeting at present. There may be more decisions delegated to the Secretary-General, but because those decisions had been agreed by consensus, in the first place, that that would be acceptable in terms of what we have just agreed between ourselves, and that there needs to be more effective management of the way in which decisions are taken. We are not talking about the key decisions. They would be done by consensus. We are talking about the way in which the organisation is managed.

So Lord Robertson's article, in which he spoke of the modernisation of decision making, was being specific about lower-level decision making, and that higher-level decision making is like chickens in the hen coop.

(Mr Hoon) That is why I do not believe that you can make that neat distinction. We have had a situation in which decisions currently taken by consensus, but which are of relatively less importance, can be devolved, for example, by consensus, to the Secretary-General. I cannot give you answers today, because the work has not begun, but it is work that we want to support and get under way. The suspicion that Lord Robertson is setting out and his experience is that too many decisions are currently taken by consensus and too many minor decisions are taken by consensus, whereas we need a more streamlined and efficient organisation taking some of those essentially administrative decisions in a more efficient and effective way.

Perhaps because I have been in politics for a long time, I have never known any group of people that makes decisions not to have a smaller group or executive making decisions before a meeting. I cannot see that NATO after enlargement to 26 or 27 will not have a "directoire" - that pleasant French term. I do not want to push you much on this point. I realise that you do not recognise the quad, so you probably do not recognise a "directoire". Will it not seem in a modern arena that you may not get consensus and that that would take a long time? The Americans mention that they do not want NATO to be involved because it would take too long to get a decision. In modernising NATO we would need to have informal and generally recognised grouping on specific subjects so that we can get on and make decisions quicker.

(Mr Hoon) This work has not started, never mind reached those specific conclusions. You are rightly concentrating on the big issues, if I can put it that way. Underlying what you are saying is that there is an understandable and appropriate concern about the problems of forces. I share that concern. I could not contemplate any circumstances in which Britain's forces would be deployed by majority. But at the other extreme, if there has to be consensus over the purchase of paperclips - there is far too much low-level decision making that involves large committees of every member state being involved - clearly there is a need to streamline some of those processes. Essentially, that is what Lord Robertson is describing.

I recognise that. I am pleased that the Russian NATO Council has been set up. It is a great move. Do you think that Russia should be involved in that informal decision making within NATO, or will it be completely separate in the Russian NATO Council?

(Mr Hoon) It is vital to emphasise that Russia is not a member of NATO. Russia has no responsibility for those internal processes. We have agreed a list of subjects that we shall discuss together in the 20, in the NATO Russia Council. We are hopeful that those conversations will go so well that the subjects can be extended, but that does not make Russia a member of NATO.

I take it that is an informal grouping.

(Mr Hoon) Russia would have no interest, and nor would we have any interest in their participation in what are essentially housekeeping responsibilities.

Jim Knight

Secretary of State, I want to move on to more specific matters of military structures in the military structural reform. I note that defence ministers agreed at the beginning of June to review NATO's command structures, which have been in place for some time and in many ways the stance appears to be very Cold War oriented. Do you think that the structures remain valid or are there too many commands spread among too many countries?

(Mr Hoon) That is essentially why we argued very strongly for a review. I am delighted that that was agreed.

Do you think that the current system of rotating DSACEUR and other senior posts is valid? Do you think that we should look at involving other countries?

(Mr Hoon) I think that those are some of the issues that we shall have to consider. Certainly the command structures are in need of review. We have agreed that. I hope that the work can proceed expeditiously after Prague.

What is your view about the direction that it should take?

(Mr Hoon) It is too soon to say.

You do not have one?

(Mr Hoon) Of course, I have a view. I cannot give you the answer. Your question tends to suggest that I have given you an answer before the review has started. All I am saying is that I accept the premise. I agree with you. Your premise is the premise that we have worked with. Even allowing for a relatively recent review - 10 years ago - the world has moved on so significantly and substantially that it is time to look again at some of those structures and the reason why we believe that it is time to reconsider them is that some of them have too many Cold War characteristics and are not sufficiently flexible and deployable for the modern reality. There is another issue with which we have to deal, which is resources. You cannot go on building new capabilities, developing new ways of deploying forces if, at the same time, you are still maintaining capabilities, and in this case headquarters, that are no longer serving the kind of purposes for which they were originally established. We need to look hard at whether we are receiving best value for the money that we are spending. There is a range of things, but I cannot give you the answer.

I would not expect you to give us the answers to a review that has only just started. Obviously, we are well used to you appearing before us and not being willing to give us answers to reviews of which you are in the middle. That is what happens. However, you have a view. We would not hold you to it when the review is published, but we are interested to know what your view is.

(Mr Hoon) Being the intelligent Member of Parliament that you are, I would have thought that you can see the direction in which we want to go from the parameters that I have set out. If you start with the criticism of having too many headquarters that are Cold War organised, that gives you one direction in which we want to go. If you start off with an assumption that says that we want more deployable headquarters and that there are too many static ones, that also gives you a flavour of the direction in which we want to go. If you say that we are concerned about spending on capabilities that are no longer relevant and that we would like to see spending on capabilities that are relevant, that also gives you an idea. I do not need to spell these out.

This is broadcast as a record so it is handy, not only for intelligent Members of Parliament but also for the wider public.

(Mr Hawtin) Without pre-empting the outcome of the review, there is not a lot that I can add to what the Secretary of State has said. NATO has reformed its staff and its structures since the end of the Cold War. We do not believe that that process has gone far enough. It needs to continue to adapt. As far as the structures are concerned, there is a NATO command structure which is the static structure, dealing with the day-to-day operations. The number of headquarters were reduced from something like 90 down to something like 20 in the last review, but we still believe, as the Secretary of State has said, that there are too many headquarters. They still have too much of a static role; they consume a large number of resources - not just financial resources but the scarce manpower resources; and we need to look at whether, given the way in which NATO is evolving, and given the different tasks to be undertaken, that kind of static structure is still the best answer for NATO's needs. Can we reduce it and streamline it and, if so, take account of the legitimate interests of member countries having NATO representation on their soil? The second and other side of that equation is how we can build up NATO's deployable capability. It needs more deployable capability, not just for out-of-area operations, but also to discharge its Article 5 collective security guarantee. The Washington summit emphasised that Article 5 needs to be handled through deployable capability and not static forces. As far as the control element is concerned, NATO is looking at what it calls high readiness force headquarters of which there will be about six, designed to provide headquarters that can be deployed rapidly overseas or wherever in the NATO area to deal with a particular task. At the forefront of those, in terms of UK leadership and modern national defence co-operation, is the ARRC - the rapid reaction corps - of which we are the framework nation. It remains NATO's only rapidly deployable headquarters and it is the first of the candidate high readiness deployable headquarters to pass the standards of full operational capability. Again, that is an example of where we are setting the benchmark.

In essence you are looking for fewer and more mobile command headquarters. Do you think that we should have one for NATO command special forces? I know that you do not like answering anything to do with the special forces.

(Mr Hoon) All countries have special forces. We certainly have always recognised that publicly. What we do not recognise is how they are deployed and where they are deployed.

As part of the review, do you think that NATO should look at having a NATO command for special forces

(Mr Hoon) I think that is to misunderstand the way in which special forces contribute to military operations. Clearly special forces add a particular contribution to operations and they are part of the equipment, if you like, that a force commander and a force generator would call upon.

It appears that they are a resource that is of increasing value. It is difficult for us to understand special forces because we cannot get answers to our questions about them. It would seem that they are of increasing value and that they are deployed more and more. From the little that we understand, there is quite a call on them. It would seem sensible that new entrants to NATO should look at that as a potential niche speciality. If we want NATO to be mobile and to deploy out-of-area, it would seem sensible that there should be some co-operation on that and it would also seem sensible to have a NATO command of special forces.

(Mr Hoon) I think you will find that most nations have forces that they call special forces and we would certainly want to see them available for NATO-led operations.

Mercer: Well done, Jim.

Jim Knight

Going back to the business of rationalising and achieving this reform of military structures, is there a potential problem in that each individual nation's allocation of posts here and there has been carefully negotiated - "You have one here and I'll have one there" - and trying to unpick that could be a long and difficult process with everyone agreeing in principle with the form but no one wanting to give up their person in a particular place.

(Mr Hoon) I am sure that the process of allocation is more sophisticated than that.

Chairman

Is what the Secretary of State says true?

(Mr Ehrman) Of course, what the Secretary of State says is true.

Chairman: He has described it exactly as it is.

Jim Knight

Do you think that we need to see a shift southwards? We have AFNORTH and AFSOUTH as the two regional commands and AFNORTH looks less relevant these days in the post-Cold War environment than AFSOUTH.

(Mr Hoon) I do not want to reach conclusions before the review has begun, but certainly those are factors that we would want to take into account.

Fewer commands, more mobile and possibly more south-based?

(Mr Hoon) I think those are some of the decisions that we shall have to reach as we conduct the review.

What difference in this area do you think that 26 members of NATO will make?

(Mr Hoon) That is part of the justification for having the review. We have to answer that question. It is a difficult exam question. Clearly, if there are that many new members, we shall have to integrate those new members into the structures and find the most effective way of doing that. It may be that that will be on a different basis from the way in which it has worked in the past.

Patrick Mercer

Moving to the war on terrorism and NATO's role therein, the support to the Americans from NATO has been huge in terms of moral support; in terms of physical support it has been more modest in terms of what has happened since 11 September. We have already touched on the operations in Afghanistan. The alliance and the coalition mounted there has marginalised NATO to some extent. What is NATO's role in the war against terrorism? The counter-terrorism role is not only a military role, but there are all sorts of lines of operation. What is NATO's role exactly?

(Mr Hoon) I do not think that I can give you an exact role. In 1999, in the Washington summit, NATO set out the fact that NATO had a responsibility to deal with terrorism. It was recognised then as a growing international challenge and threat to military forces. The events of 11 September demonstrate the wisdom of preparing for that. NATO has had a number of different roles since 11 September. The declaration of Article 5 was an enormously significant event. The deployment of AWACS was hugely welcomed by the United States because that released a vital capability for forward operations, as was the use of the naval force for reconnaissance purposes. I think Brian gave you the answer earlier. The real contribution that NATO has made, which is why it is difficult to be precise, is in establishing common standards, interoperability, ensuring that when allies forces deploy, they deploy and are able to work effectively alongside each other. That standardisation is something that is absolutely central to the way in which NATO operates and will continue to be.

What can NATO do to help to protect its member states from international terrorism, particularly in relation to attacks of mass destruction?

(Mr Hoon) The most important point is to have available the expertise that allows us, if a military response is appropriate, to be able to deal with that threat at source. That, in effect, is what we are doing in Afghanistan.

Would there be mileage in having the NATO counter-CBRN forces worked up in such a way that, say, if Germany were struck by a biological attack that NATO forces could be brought in?

(Mr Hoon) In terms of any kind of military capability there is always a debate as to how that is best provided, whether centrally - having in effect what amounts to a standing force to which countries subscribe financially - or whether it is better to have forces that each country generates for itself, but those forces are subject to the kind of standardisation that is the hallmark of NATO and they become interoperable as a result of satisfying common standards. There are difficult judgments to be made. If you ask me as Secretary of State for the United Kingdom where my preference would lie, by and large it would lie in each nation subscribing capabilities because I think that that is easier to explain and more readily understood by the people who put us here because ultimately it is their taxes that pay for it. They would want to see some benefit for the United Kingdom of having those forces. Equally, I recognise in an increasingly interdependent world that those forces have to be able to work alongside forces of our allies. That is something that the United Kingdom has strongly supported over a very long time and will continue to support into the future. Indeed, on previous occasions I have described that to the committee. Part of my ambition is to see ways in which our forces are much better integrated with the forces of other countries because that allows them to be deployed even more rapidly, particularly as, in your example, we are talking about relatively scarce capabilities that we need to continue to be able to develop.

Mr Howarth

Following on from what Patrick Mercer has raised with you, in your department brief to us you talk about the future role and mission of NATO. You say: "The UK Government believes that the Prague Summit must build for the future by", and then you list a number of points. The first is, "Making the Alliance more effective against the new threats of terrorism and Weapons of Mass Destruction". Do you mean by that weapons of mass destruction in the hands of small groups of terrorists, or do you mean the threat posed by rogue states?

(Mr Hoon) Both.

In this document there are quite a few references to NATO's role in dealing with this threat; for example, in terms of capabilities your department says that "Foreign and Defence Ministers agreed at their 2002 spring meetings that a follow-on to DCI should be launched at Prague. Defence Ministers envisaged that it should seek specific improvements in the areas of: defence against chemical, biological, radiological and nuclear attacks". Does that extend to rogue states or is this simply a NATO role in dealing with small groups of ad hoc terrorists?

(Mr Hoon) It applies to dealing with the threat from wherever it arises.

In that case, do you envisage a role for NATO? Should we read in this document an enhanced commitment to working with the United States in the development of missile defence? You have come to this committee before and to the House, and every time you have been asked, "What is the United Kingdom doing to support the United States in that programme of missile defence?" You have always said, "We have received no requests from the United States", and that the United Kingdom has a very small role in this matter. Unless you specifically reject this, it seems to me that this document indicates an intention that NATO should do more , but we see no evidence that it will do more to deter rogue states.

(Mr Hoon) You are trying hard to work the phrase "missile defence" into what you have said. As you will be aware, there is a range of means of defending against weapons of mass destruction. It is vitally important that NATO looks at those means of developing those defensive techniques. Missile defence is one of them which the United States is pursuing vigorously.

What is NATO doing?

(Mr Hoon) That is not to say that that helps you at all in the direction in which we want to go. I repeat that the United States has made no request of the United Kingdom for specific assistance in developing its specific missile defence capability.

This document was delivered to the committee. What is meant by the phrase, "Defence Ministers envisaged that it should seek specific improvements in the areas of defence against chemical, biological, radiological and nuclear attacks"? If we are not talking about dealing with rogue states, and you are not going to identify individual states, what does that mean? Can you tell us what specific improvements you are intending to try to secure at Prague?

(Mr Hoon) Again, you are inviting me to answer a question on which NATO has yet to start work. That is perhaps overstating the case a little, because obviously already we seek to develop defences against weapons of mass destruction, but there is a range of potential options available to us and that is why specifically we are looking to agreement at Prague for furthering that effort.

We are trying to get specific answers, Secretary of State.

(Mr Hoon) If you are patient and wait for the outcome of Prague, I may be in a better position to give you those answers.

You say that, "The UK Government believes that the Prague Summit must build for the future by: Making the Alliance more effective against the new threats of terrorism and Weapons of Mass Destruction". What proposals will you put to our NATO allies in Prague to achieve that outcome?

(Mr Hoon) I am sorry. I am going to put those proposals to our NATO allies so I am not going to announce them today.

Why cannot the House of Commons be told?

(Mr Hoon) Because those proposals are not yet there.

Chairman: I think we shall move on.

Mr Howarth

I think we are entitled to know.

(Mr Hoon) Let me make it clear, Mr Chairman. I am sorry that Mr Howarth chooses to make his comments in the way that he does. The Ministry of Defence will certainly inform the House of Commons, at the appropriate stage, but it is not appropriate, nor has it been appropriate for any government, for those kinds of suggestions to be made long before they have been prepared and submitted to our allies. It would be totally inappropriate. If Mr Howarth gives half a second of thought to the matter, I am sure that he will agree with that.

Chairman: Let us move on. We have half an hour left.

Mr Howarth

I think this is a matter of concern. I turn to a suggestion that has been put to us that there is discussion in Washington on the development of the European strike force within NATO that will operate alongside US forces in high intensity warfare operations. Would you welcome that development?

(Mr Hoon) There are certainly some emerging ideas. They have to be set out in detail. They are ideas of improving not only Europe's ability, but NATO's ability to deploy collectively a strike force more quickly than is the case at present and we strongly support that. That has been the thrust of defence reform in the United Kingdom since the Strategic Defence Review in July 1998. It is the thrust of the work that we have commissioned in the Ministry of Defence since 11 September. We shall be reporting to Parliament in due course. It is about NATO being able to respond effectively and quickly to the kinds of threats that exist in the world. We strongly support that and we strongly support the alliance developing those sorts of capabilities.

At the risk of sounding impertinent, how do you see that European strike force being composed?

(Mr Hoon) Perhaps you did not listen to my answer. It is important that NATO develops those capabilities and those capabilities are wholly consistent with the kinds of reforms that the United Kingdom and indeed other NATO nations have been engaging in since the end of the Cold War. Some of those reforms have gone more quickly in some countries than elsewhere, but clearly our ambition is to ensure that each nation reforms in that direction. Everyone agrees that rapidly deployable forces are where we need to go in a military sense. I hope that what I have said to the committee today about the kinds of reforms that we want NATO to engage in are wholly consistent with that. It is about being able to deliver a military force quickly to wherever it is needed.

You are in favour of these discussions continuing?

(Mr Hoon) Strongly in favour.

And in favour of the development of a European strike force.

(Mr Hoon) Can I try again? I have said that I am in favour of NATO developing those capabilities.

Rachel Squire

I want to carry on with a few more questions about capabilities. You have said that reforms have been taking place at times somewhat slowly since the end of the Cold War among NATO allies.

(Mr Hoon) I said that it was less quick than in some countries.

Indeed. I gathered that discussion about the gap between the defence capabilities provided by the European members of NATO and the United States is a discussion that has been taking place since the 1950s, so it is not exactly a brand new concern. Clearly, in recent years we have all spent a lot of time talking about the need for European allies within NATO to provide more. We have had the defence capabilities initiative and we have now the European security and defence initiative and the European security and defence policy. Recently, the NATO defence ministers had a meeting in Brussels to talk about the progress and how to move it on further, as did the National Atlantic Council. I am interested in what makes you confident that the willingness and determination is there to deliver an improved European defence capability within NATO, especially as I confess that when I have spoken to some of my parliamentary colleagues from other European nations about this issue, I have at times reached the point of politely or less politely saying that it is time to talk less and do more. Why are you convinced that there really is the determination this time to deliver?

(Mr Hoon) That is a fair question. Implicit in your question is the suggestion that somehow these initiatives have failed. I would not accept that. The Helsinki Headline Goal Catalogue process, for example, is already delivering improved capabilities and I am confident that it will continue to do so. The defence capabilities initiative of NATO has had some significant successes, but while I recognise what I say, more still has to be done. We either reinvigorate the existing process or we more narrowly focus our targets for the future. There are successes and capabilities in Europe that have improved, but it is a moving target and we have to maintain the pressure. That is why we strongly support the emphasis on capabilities. As I indicated earlier, it is Europe that has to improve.

Are you aware that one of the areas of discussion has been that NATO allies should look at greater roles of specialisations and pooling arrangements. What is the United Kingdom's Government's view of that? Also what are your own views as to the future direction?

(Mr Hoon) There are a number of aspects to it. I gave the example earlier of perhaps a smaller country, historically keen to provide, say, an infantry battalion that generally speaking is readily available from any number of other countries. That is a practical problem that I had to deal with during the vacation last Christmas when we were preparing for ISAF to go to Afghanistan. Any number of infantry battalions were available, but not so readily available were some of the specialist functions that we required. Therefore, we can discuss with aspiring nations - it applies equally to established members of NATO - the development of niche capabilities, particularly where those capabilities are in short supply, even among the largest military nations. Even the United States will recognise that there are areas of its military capability where it would like to have more capability. If an ally is capable of supplying a particular capability at short notice that can be rapidly deployed and sustained, that will be welcomed as a contribution to a military deployment. In that sense it will give a smaller country an edge, a capability that will allow it to sit at the table, as I said earlier. At the other end of the spectrum - there is a whole range in-between - there are those high-technology capabilities that are increasingly expensive and require research and development in the first place that a number of countries working together may seek to develop, whereas individually they would not be capable of doing so financially. Therefore, that is a way in which countries may want to pool their resources, as we are doing already with strategic airlift, in order to make available a capability that was not otherwise readily available to them. Between those two extremes is a whole range of different kinds of co-operations that are happening already and that I envisage will happen more in the future.

Clearly, you are saying that there is widespread recognition that in today's modern world, with the type of threats that we now face, it is unrealistic to think that any individual nation can provide absolutely everything.

(Mr Hoon) That is absolutely right. If you asked that question of the United States, I believe that they would be the first to recognise that the United States has an enormous range of military capabilities and is committed to operations right around the world, but undoubtedly it welcomed, and continues to welcome, the contribution that allies can make in Afghanistan, with the particular requirements of that deployment and elsewhere. It follows what we have been discussing all morning, that in an increasingly uncertain world, the chances are that you will not make just one deployment and may have to face simultaneous deployments of forces in different parts of the world, as we do at the present time. In those circumstances, what is initially a scarce supply will come under real pressure. The more countries that can develop some of those important niche capabilities the better things will be.

The last point brings us back to the harsh reality of defence spending. There is the matter of agreement among the European NATO allies that more needs to be spent on providing defence capabilities. The point has been made that it is not only how much is spent, but how the money is spent. Could you comment on that and the extent to which your discussions with fellow European NATO allies has focused on the level of expenditure and on the way in which the money is used?

(Mr Hoon) I strongly agree with that. Ideally, we would like to see countries spend more, but equally we would like to see them spend better. That means looking at lists of capabilities, at what we need to develop and agreeing how that should be done. Some time ago my Dutch counterpart said publicly that in his view future Dutch defence spending would address the shortfalls identified in the Helsinki Headline Goal Catalogue. That would be his priority. Obviously, we have to maintain the pressure in terms of encouraging other countries to spend more on defence and we must encourage them to spend it more effectively.

I am prompted to ask you whether you want to make any comment on Britain's defence expenditure.

(Mr Hoon) Britain has been increasing its defence expenditure in recent years, after a long period in which defence expenditure was seriously reduced. I hope to see that trend continue.

Chairman: That is a statement! We had some good preparation for your session as we went to Russia last week.

Syd Rapson

The Bush administration increased its defence budget by $48 billion in the wake of 11 September and we understand the support that that received. That is one-and-a-half times our budget. They said that most of it would be used on research and development in the high-technology field. Some of the explanations are simple. They said that they would throw money at developments and if it does not work they will try again. That is a very nice position to be in. A lot of the capability is in the hands of the private sector. It seems that with all that money forced into the American chosen private sector of defence manufacturers that their capability will get better and better and we in Europe will not receive the benefit. Is there a real danger that in the end we shall have to buy off the shelf the Americans' chosen systems to maintain the capability, so undermining European-based manufacturers and severely undermining European industrial policy? That is my worry. We cannot keep up as a European or a British nation and we shall have to buy off the shelf because the Americans will own their equipment in communications, sensor to shooter technology and unmanned vehicles. It will be a real worry for us and will undermine our industrial policy.

(Mr Hoon) I think you have set out clearly the dilemma that has faced governments over a long period of time. I am just about old enough to remember the debate about the TSR2. I am not sure that at the time I knew what the TSR2 was, but I remember that being debated as you have set out: whether we should invest significant sums of money on developing capability for ourselves or whether we should buy American aircraft off the shelf. That is still an issue today and it will continue to be an issue. We have to make judgements. If all the research and development produced equipment that worked first time and on time, it would be much easier to deal with. As you fairly set out, research and development does not always produce results on time, and sometimes research and development will undoubtedly fail and cost the taxpayers a great deal of money. I suspect that this committee will be among the first to criticise any government that spends large amounts of taxpayers' money and fails to produce capabilities. It is always tempting to buy proven equipment off the shelf. Given the sophistication of Britain's equipment and armed forces, the likelihood is that most of that equipment bought off the shelf will come from the United States. They are devoting the necessary research and development to providing those capabilities and they are prepared to accept the cost of failure. That remains a dilemma for the United Kingdom. We shall continue to make our judgments as we think appropriate. There will be times when we develop equipment ourselves. The A400M developed in conjunction with our allies and the meteor missile for the Eurofighter are examples where we are engaging in some leading-edge technology along with our European partners. Equally, there will be other cases where we judge that it is appropriate to buy off the shelf generally because of the pressing need to have the equipment in service in order to participate in appropriate deployment. There is no easy answer to your question. The only comfort I can draw is that it has affected every defence minister in our history. I suspect that at one stage blunderbusses were probably cheaper on the Continent than they were to manufacture in the United Kingdom.

Let us hope that the Treasury reads the minutes of this meeting.

(Mr Hoon) I am sure that you could use your influence in that direction just as much as I can.

I hope that yours is greater.

(Mr Hoon) So do I!

Mr Jones

Following that point, and talking about the co-operation of the European allies on projects, do you think that there is scope for greater co-operation with America?

(Mr Hoon) We have entered into arguably what may be the most expensive defence project in history, which is JSF. It is interesting and I hope consistent with what we have been discussing already, that the United States was looking for a partnership with the United Kingdom in developing a sophisticated aircraft. I am delighted that we are doing that.

Jim Knight

The feedback that I am receiving on that is that understandably the American partners are hanging on carefully to their intellectual property and that the UK element is little more than metal bashing.

(Mr Hoon) That is a disgraceful suggestion. Companies based in the United Kingdom already supply vital components for the F-16s, for example. I do not accept that at all. This is the way in which the defence industry is developing. We have particular niche specialities that the United Kingdom specialises in and they are increasingly in demand around the world. Obviously, in the United States there is more likely to be an A to Z of industrial capabilities, but it misses out some important letters on the way and other countries will have the opportunity to fill those gaps. That appears to be the way in which defence industries are developing around the world. Clearly, there is a great deal of industrial capabilities in the United States, but that does not say that it is exclusive. The JSF is a very good example of the way in which the US is looking for partnerships in the development of those kinds of leading-edge technologies.

Mr Jones

Turning to relations between NATO and Russia, the Chairman said that the committee was in Moscow last week. We had much discussion about the future relations between NATO and Russia. Time and time again the phrase "the proof of the pudding will be in the eating" came through in relation to how it will develop. How do you assess the effectiveness of the NATO Russian Council?

(Mr Hoon) In the short term, my judgment, having sat through some not tremendously exciting permanent joint council meetings, is whether we can engage in a dialogue with Russia as a sovereign nation. The real problem with the GAC was that essentially it was a meeting between Russia and NATO. Both sides, if that is the right description - it should not be but sometimes it felt like that - simply set out their positions and in a way Russia saw itself as the inheritor of the mantle of the Soviet Union and, therefore, engaged in a dialogue with NATO. What is significant about the way in which NATO functions at NATO council meetings is that sovereign nations sit around the table - I do not know whether I shall get into trouble for saying this - and whether it is Luxembourg or the United States, they set out their views. Ministers representing democratic societies are able to do that. What is important about the way in which the NATO Russian Council works, and my assessment of whether it is successful, is whether we have that kind of discussion around the table with 20, because I believe that that way of exchanging ideas is enormously important. Certainly in my immediate counterpart I see no difficulty about that. The Russian defence minister is an extremely sophisticated supporter of reform and has enormous influence in the way in which Russia is developing. Thereafter, you would want to see, as I would, progress on the specific issues that we have identified as being subjects for discussion by the 20. After that, the further stage of defining success will be whether we are capable of adding to that list. After a period of discussion around a table of 20 we may say that there are new subjects that we now feel capable of adding to our agenda.

That is one of the first clear answers that you have given today.

(Mr Hoon) Am I to receive points for that.

No, you get points for avoiding questions! Last week when we were in Moscow, we came up against the Cold War mentality, both from some in the military and from some journalists whom we met and some politicians. It is difficult to work out who are the politicians and who were generals in a previous life. What can be done to try to allay those fears? That fear is still there, if not at the higher level of administration, in society and in the military.

(Mr Hoon) I am a little surprised that you find it surprising that in a democratic nation there is a range of views. I dare say that if I tried I could find places in the Ministry of Defence where there is still some Cold War mentality lurking. That is what happens in democratic societies. There is a range of views and there are tensions. It would be disappointing if you went to a country and met only one view. That would mean to me that the country was not very democratic. You need to recognise that Russia has changed significantly and that there is a range of opinions as there is in London and Washington. That must mean that Russia is making fairly significant progress.

You have not answered the question. What can NATO do to bury some of those Cold War attitudes?

(Mr Hoon) I think that is why meeting the 20 is such a significant development. It means that Russia is sitting around the table with 19 other sovereign nations and exchanging views and ideas about vitally important subjects that affect our security for the future. This is a process. Just because the Soviet Union came to an end does not mean that everyone in the Russian federation suddenly woke up and decided that every aspect of the Cold War mentality was driven out. I suspect, as I say, that lurking in the Ministry of Defence there are a few Cold War attitudes. There are certainly a few in Parliament.

Chairman

I appreciate the point that you are making. However, people who have spoken to us have indicated that President Putin is happy with the drift of his policies; his presidential administration is pretty happy; and maybe the defence minister is; but most people in the admiralty and the defence ministry do not like it; and lots of people in the foreign ministry do not like the drift of Russian policy. The number of NGOs that do not like what is happening is quite considerable. I appreciate you taking that view, but realistically there is a concern that there are too many people in the Russian military and in the Russian government for whom the initiatives of President Putin are seen as retrogressive. I cannot see in what other direction Russia can move, except the one towards which President Putin is moving. Even before we went there we met people who accepted what is happening, but we met a lot of people who were not displaying ostentatious hostility, but who did not take too long to develop a perception of the way in which they are moving. Our concern is that if President Putin should fall under the proverbial bus, will that policy be subject to substantial change? Has the momentum that he has created, and which we all endorse and applaud, gone far enough to ensure that it will become a relatively permanent feature of Russian national security policy? We know that there are people who are hostile to development, but is there anything that we can do to convince them, more than we are trying to, that the Cold War is genuinely over? One question raised with us by someone in the foreign ministry was on a statement that you made on nuclear strategy in response to Mr Jones. We were told by another observer how we still target Russia, but we sought to reassure him that we did not. It was an interesting visit and positive in so many ways, but we regret that level of anxiety that much remains to be done within NATO. We need to be concerned, we need to be able to identify whether in the NATO Russian Council we are doing everything on the NATO side and the national government side to push it along as far as we can and we need to be careful about anyone sabotaging what is happening. There must be people in advisory capacities who may not be entirely sympathetic with the general thrust that thankfully has emerged within NATO and within the presidential administration in Russia.

(Mr Hoon) I think those implied criticisms would have been fair before the agreement to establish the NATO-Russia Council. Had we failed to do that - and Tony Blair was amongst the leading advocates of creating the Council - and had there been NATO nations who were implacably opposed to it and would not accept its creation, then there might have been some substance in what you are saying. However, at the point at which this is just getting under way and we are just beginning this kind of dialogue with Russia, I think it is a little unfair to be quite so pessimistic. I accept that you are setting out a strain of thinking that is around here and in Washington and in Moscow, but in fact the Russians have agreed to participate in the NATO-Russia Council, and enthusiastically. At the first meeting that I attended at 20 every single nation spoke in a way to demonstrate how keen they were on it being a success. I think you simply have to give us some time to establish that new institution and make it work and subject it to the kinds of tests that I have set out.

Chairman: I hope your perhaps pessimistic assumption or aspiration is realised.

Jim Knight

As I understand it, a principal difference between 19-plus-1 and NATO at 20 is the lack of pre-cooking going into meetings. We now know that the quad does not exist.

(Mr Hoon) It does not formally exist.

That is helpful, yes. That is what I said, that the quad formally does not exist. So are you giving a message to our representatives that informal caucusing prior to meetings, that might coincidentally include the same sort of people time after time, should be more sensitive with NATO at 20 or should include Russia?

(Mr Hoon) I think the question has actually been answered already. There are a range of contacts that take place, and from time to time those contacts will certainly include Russia. The Russian Defence Minister has visited here relatively recently. I am looking forward to visiting him very, very soon.

Chairman

On a boat, I understand?

(Mr Hoon) So I understand as well, yes. I think that in engaging in this process of reform, one of the really serious changes that has taken place in recent times is the opportunity of picking up the telephone and discussing issues of mutual concern with the Russian Defence Minister. It would have been impossible to contemplate doing that not so very long ago. I just want to give you a sense of the way in which this works. There are constant contacts amongst allies in a variety of different formats, sometimes in periods of difficulty one following rapidly on the other, because that is the way that modern society works. With regard to the idea that suddenly we wait for a formal meeting with a certain number of people around the table, before trying to address a problem or a crisis, it just does not work like that.

Jim Knight

But we have to be sensitive about how we handle that, if it is going to appear in Russia to be any different from the Permanent Joint Council?

(Mr Hoon) I strongly agree with that. That is why I said, in answer to Kevan's question originally, that the first test for me as to the definition of success is whether there is a sense around the table that we are having an effective dialogue and that there is a real discussion going on, as opposed to simply reading out position papers - which I assure you is not the prerequisite either of Russia, there are many countries who turn up to meetings and read out a very carefully prepared statement.

Chairman

That is not including your prepared statement earlier this morning, Secretary of State?

(Mr Hoon) No, that was an exciting one!

I see. Now we come to the last question on this, and then Gerald will come in with a concluding question. I suppose that this new institution is meant partly to reassure: to reassure the Russians that they are not being too sucked in by NATO; to reassure the Balkan States who, having to join NATO perhaps to escape Russia, now find themselves sitting alongside them, which I suppose is inevitable and that is welcome; but thirdly, to reassure Ukraine who will not be participating in this new structure. What could NATO do, or should they do anything - I think they should - to ensure that Ukraine is not isolated by any new relationship between Russia and NATO?

(Mr Hoon) I am sure you are not intending to be defensive and conservative in your question, but I do not think it is about reassurance. I think it is actually getting out of these meetings of 20 real improvements in security. It is about ensuring that we co-operate together on terrorism, on crisis management. It is actually getting real commitment from Russia and from NATO allies that they will work together. One of the significant changes brought about by September 11 is a much greater recognition than before that we have common interests with Russia in tackling some of these issues, and moreover are prepared to make the means available to achieve that. So it is much more than just reassuring people. As far as Ukraine specifically is concerned, then obviously there are implications for Ukraine. I think you have seen some of those inherent in recent announcements. The Ukraine has announced an ambition ultimately to be a member of NATO. I think there is a significant amount of work that would have to be completed before that could happen. Nevertheless, it is an indication of the direction in which Ukraine wishes to go, certainly entirely consistently with what I have said already in terms of defence reform, reform generally in the Ukraine. If they wish to pursue that path, we would strongly support that.

Would there be any plans to upgrade the existing NATO-Ukraine relationship?

(Mr Hoon) Certainly I think we also have to engage with Ukraine in the kind of dialogue that I am just describing, but given that in a sense Ukraine has announced that its policy is ultimately to want to be a member of NATO, then we will be engaging in that process in any event, because there will be the kind of discussions, the kind of processes that we have discussed earlier in relation to NATO aspirants, as far as the Ukraine is concerned.

(Mr Hawtin) I would simply add as an illustration to your point, Chairman, that the NATO-Ukraine Council is actually meeting in Ukraine Kiev on 9 July, at ambassadorial level, to take forward discussions on what their recent declaration means and how it should be pursued.

Chairman: Now the last question. Mr Howarth.

Mr Howarth

Secretary of State, you will be aware that one of the NATO activities is the peace-keeping operation in Bosnia at the present time. You may also be aware that the United Nations mandate runs out this weekend and that there is some difficulty about its being renewed. The issue of the International Criminal Court is at the centre of this. Can I ask you a question about this, because it does seem that this is another issue where there is a difference of view between the United States and other NATO partners, and here is a NATO operation. I wonder if you are concerned about the possibility of the mandate not being renewed? I gather that our ambassador to the United Nations has said that he is pessimistic that there appears to be no common ground between the two sides. Are you satisfied that our troops enjoy the same kind of immunity as the United States troops wish to have or the United States Government wishes to have for its troops?

(Mr Hoon) Immunity is not quite the right word. We have signed up to an international agreement establishing an international court. What I am absolutely satisfied about is that there are appropriate procedures for ensuring that any member of Britain's armed forces who was accused of any crime relevant to the ICC would have the opportunity of a proper and fair trial, and primarily that that proper and fair trial would be conducted in the United Kingdom.

Mr Howarth: The Americans, of course, take a very different view.

Chairman: Hang on, we will not stray too far here.

Mr Jones: I do not see what this has got to do with this.

Chairman: Hang on, Kevan, we are just about to conclude.

Mr Howarth

I quite accept that the United States Administration and the British Administration will not always see eye to eye, but there is an issue here. It is clearly another area of friction that is developing with the United States, a body on whom NATO is hugely dependent. If they are going to pull their troops out of Bosnia because they cannot persuade their allies to see their point of view, and if I can remind you - though I will not need to, as this is not new to you - that France has secured a seven-year opt-out of the ICC, and we chose not to do so, there is a real risk here, is there not, Secretary of State, that this is another irritant that is going to drive a wedge between the United States and NATO, if we are not careful?

(Mr Hoon) Let me make it clear, we strongly support the idea of an International Criminal Court, have done so and have negotiated appropriate protection for our forces against malicious or unjustified allegations against them. I have looked very carefully at those protections and believe that they provide the proper standard for British forces. The United States has taken a different view in relation to what is an international agreement. That does not actually cause friction or irritation between us. It is actually part of the grown-up world in which we operate that from time to time we do disagree, and I do not think that should be terribly surprising, but it is not causing any difficulty in our bilateral relationship with the United States. Certainly there does need to be a resolution of the mandate for forces in Bosnia, but the mandate has been extended until June 30^th, and I am confident that there will be an appropriate resolution.

Chairman: Thank you very much. Our mandate has expired a little early. We shall let you go for lunch and to prepare for your fights with the Treasury on how much your budget is going to be. Thank you very much.